If you’ve ever worked for someone else (and let’s face it, most have), there’s bound to have been a time when you thought about the benefits of owning a small business. One where you set the hours you work, decide the direction you take – and determine how much you take home. Small company benefits can take many forms. But business ownership has its pitfalls, too. So before you order that new desk or get signs made, here are some important things to consider.
Only 50% of small businesses make the 5-year mark1
Best to start with a sobering fact. Not to deter you, but simply to tell it like it is. To survive in business – let alone thrive – takes more than the steely determination and healthy starting capital that movie portrayals of start-ups would have you believe.
However, this high risk of failure sorts the wheat from the chaff. If the possibility of years of hard work ultimately resulting in a folded company gives you fear, don’t give up your day job. But if you’re prepared to build a thorough business plan, work out a contingency and source the necessary funds to hire an initial team of talent, you might just have what it takes.
The buck stops with you
When things go well, it’ll be your whole team that shares the glory. And it’ll be you who decides what small business benefits for employees will look like. But when times are troubling – or when something simply hasn’t gone to plan – all eyes will be on you. Is that a level of responsibility you can handle?
Owning a small business gives you a lot of control. It also means making a lot of decisions. So unless you have a time machine that can show you whether your thinking and actions will ultimately pay off, you need to be prepared for more than just success.
You might empower your team to make important daily decisions. But the long-term goals get signed off by you. So you’ll need to decide what’s worth the company’s time, effort and money, and what’s not. You also need to be prepared for challenges: from your team, from the marketplace, and from the unexpected (best laid plans, and all that).
Don’t think you’re too small to innovate
Innovation doesn’t belong solely to the tech behemoths nestled in Silicon Valley. It happens one small company at a time. With two-thirds of net new job opportunities in America coming from small businesses2, it’s not hard to imagine that yours could soon join the legion of smaller companies that drive and create competition.
Small businesses have the ability to make changes in their community – both through the services they offer, and through the way they operate. And if an idea originating from your small business takes off and captures the imagination, it could soon also corner the market.
Growth is not a dirty word
You may be one of those potential small business owners who plans to start small and stay small. Good for you – many firms do this and make a good living. But just because you began with modest ambitions, that doesn’t mean you can’t someday decide to grow in new, exciting and (possibly) profitable directions.
Warby Parker is a great example of a company that did just this. The company started in 2010, with four friends operating the business3. They sold prescription eyeglasses online – something that wasn’t all that common at the time. The business sent glasses to their customers to try on, and allowed them to send back those they didn’t like. This was a completely new idea in 2010, and it changed how consumers bought prescription glasses.
They started online, and eventually built brick-and-mortar stores. While their online offerings are still the largest part of their business, they continue to grow. The business is now worth over $1 billion4.
Sure, not all small businesses will grow like Warby Parker. But the opportunity is there – and who knows, your small business might.
Small businesses create jobs
Now more than ever, the US workforce needs smaller businesses to help stimulate job creation. Millions have been left unemployed by the impact of COVID-19, and it’s to small business owners that many will look to get back into work.
Get your business idea out of your head and into the world, and you could soon play a vital role in helping others to earn again. You’ll get to make decisions about the type of work someone is best suited to do, the pay they receive, their hours, working conditions and the benefits they get – from time off to health care options.
Small businesses make communities
When you start planning your small local business, you may not think of its benefits to the community it’ll be part of. But the plain fact is that the services or products your business offers will become integral to your community.
Let’s say you open an independent coffee shop. It’ll become a place people visit regularly, perhaps even every day. Having a nice place to go that serves good coffee and has friendly employees can be a real comfort to people as they go about their week. It might even be the venue where the next big small business idea gets started.
What about the money?
There’s no sense in dressing things up: there IS always a financial risk when starting a small business. But if your company succeeds, the freedom to determine your own pay – and that of your people – is hard to beat. Because no matter how hard most of us work as employees of others, our paycheck is set by someone else. We can hope for a raise. We can request one. But even if we’re working harder than everyone else, there’s still the chance we won’t get any extra each month.
As a business owner, you also get to see the financial rewards of your hard work beyond what you can afford to pay yourself. It’s you who sets your business’ financial goals for the year. You who creates the plan to make those goals a reality. That plan may flex, it may not work – but the opportunity for success is there, in your hands.
Work-life balance is down to you
When you’re a small business owner, you make the decisions – and that includes about how and when you work. Most entrepreneurs work a lot of hours, of course. If being the boss was easy, everyone would be doing it. But once you’re in charge, how, when and even where you work is entirely down to you.
This might benefit you if you need a proper work-life balance. For example, you might have young children, or outside commitments in the community. You might simply be looking for a way of working that doesn’t look so much like your old 9 to 5. Whatever your reasons, you’re the one who gets to choose. Call it a perk of the job.
You can also take a more flexible approach to the types of tasks you undertake. So if the financial side of business isn’t something you excel at, you could hire someone to handle it for you – freeing you to focus on those parts of your business that you’re best at.
Still want to be your own boss?
If the thought of making decisions that affect you, your employees and your customers doesn’t make you think you might go running back to your old job, perhaps your time has come. Put in your all, make your small business a success – and when you’re ready to offer your employees a health benefits plan that’ll make them feel valued, talk to us.
- 1) https://www.forbes.com/sites/forbesfinancecouncil/2018/10/25/what-percentage-of-small-businesses-fail-and-how-can-you-avoid-being-one-of-them/?sh=39faff043b5f
- 2) https://advocacy.sba.gov/2019/01/30/small-businesses-generate-44-percent-of-u-s-economic-activity/#:~:text=WASHINGTON%2C%20D.C.%20–%20Small%20businesses%20are,drive%20U.S.%20innovation%20and%20competitiveness.&text=Over%20the%20same%20period%2C%20the,terms%2C%20or%201.4%20percent%20annually
- 3) https://www.forbes.com/sites/stevedenning/2016/03/23/whats-behind-warby-parkers-success/?sh=bc35821411ac
- 4) https://www.forbes.com/sites/stevedenning/2016/03/23/whats-behind-warby-parkers-success/?sh=bc35821411ac